Chapter 10: extending the organization – supply chain Management

Supply Chain Management in short is a system that an organization used to communicate with other company (suppliers or customers) in order to ease the flow in purchasing or selling ready or raw materials to other organization.

Basic of supply chain:

  Five Basic Supply Chain Management Activities:

Factor Driving Supply Chain Management:  

      

Supply Chain Planning and Supply Chain Execution: 

software’s Correlation to the Supply Chain:

3 Factor Fostering Supply Chain Speed:

i-                    Pleasing customers has become something of a corporate obsession. Serving the customer in the best, most efficient, and most effective manner has become critical, and information about issues such as order status, product availability, delivery schedules, and invoices has become a necessary part of the total customer service experience. 

ii-                  Information is crucial to managers’ abilities to reduce inventory and human resource requirements to a competitive level.

iii-                Information flows are essential to strategic planning for and deployment of resources.

7 Principle of Supply Chain Management:

i.            Segment customers by service needs, regardless of industry, and then tailor services to those particular segments.

ii.            Customize the logistics network and focus intensively on the service requirements and on the profitability of the preidentified customer segments.

iii.            Listen to signals of market demand and plan accordingly. Planning must span the entire chain to detect signals of changing demand.

iv.            Differentiate product closer to the customer, since companies can no longer afford to hold inventory to compensate for poor demand forecasting.

v.            Strategically manage sources of supply, by working with the key supplier to reduce overall costs of owning materials and services.

vi.            Develop a supply chain information technology strategy that supports different level of decision making and provides a clear view (visibility) of the flow of the products, services, and information.

vii.            Adopt performance evaluation measures that apply to every link in the supply chain and measure true profitability at every stage.

 Keys to Supply Chain Management (SCM) Success:

i-                    Make the sales to suppliers

ii-                  Wean employees off traditional business practices

iii-                Ensure the SCM system supports the organizational goals

iv-                Deploy in incremental phases and measure and communicate success

v-                  Be future oriented